SEOUL (Reuters) - U.S. President Donald Trump’s decision to cancel next month’s summit with North Korea’s Kim Jong Un came as shock to South Korean officials, who only days ago were publicly predicting a “99.9 percent” chance the meeting would proceed as scheduled.

Already on shaky ground amid stalled talks with North Korea, South Korea’s ability to fulfill its self-assigned role of mediator between Pyongyang and Washington suffered the biggest blow yet when Trump apparently failed to give his allies in Seoul a heads up about his announcement.

The setback follows months of diplomatic progress that led to a historic summit between Kim and South Korean President Moon Jae-in in April.

Some experts said the canceled meeting might add to scepticism in Washington that Moon might have misled Trump on North Korea’s willingness to abandon its nuclear weapons program, although U.S. officials have held at least two face-to-face meetings with Kim in recent weeks.

Coming just a day after Moon returned from a trip to Washington to convince Trump to proceed with the summit, the about-face also signaled friction between the old allies over how to deal with a nuclear-armed North Korea.

Pictures released by South Korea’s presidential Blue House showed a glum faced Moon in an emergency meeting with security advisers near midnight to review Trump’s letter to Kim cancelling the summit. Moon described the decision as “perplexing” and “regrettable”.

While sharing the goal of complete denuclearisation, Moon’s government is more eager for dialogue and has urged Washington to address the North’s security concerns even as Trump’s top aides warned Pyongyang to swiftly forsake its nuclear arsenal or face the fate of Libya.

“They overestimated what the North means in terms of denuclearisation and oversold it to Washington,” said Chun Yung-woo, a former South Korean nuclear negotiator.

“You get sick if you eat undercooked food. You get caught if you sell fake stuff as luxury.”

DIFFERENCES WITH THE U.S.

Relations between North and South Korea, still technically at war after their 1950-53 conflict ended without a formal peace treaty, have dominated Moon’s first year in office.

Moon had been credited with creating conditions for peace by bringing the old foes on a diplomatic path, after North Korea’s relentless pursuit of a nuclear-armed missile capable of hitting the United States raised fears of a fresh war on the Korean peninsula.

But there was lingering concern among U.S. officials that Kim was not serious about relinquishing the nuclear weapons his country has developed for decades - an issue that will continue to complicate any future talks.

Moon will not be able to act on many of the agreements he made with Kim at their summit unless meaningful progress is made on the nuclear issue, which requires cooperation by the United States, said Cheon Seong-whun, a former secretary to the president for security strategy.

Even after U.S. Secretary of State Mike Pompeo traveled to Pyongyang and met Kim twice to confirm Kim’s commitment to denuclearisation, Trump has repeatedly warned the encounter might not take place or he could walk out if it looked like a deal was not possible on the North’s nuclear program.

“The United States might have been discontent with the difference between what South Koreans told them about denuclearisation and what they actually found out when they met the North Koreans,” said Koh Yu-hwan, a professor in North Korea studies at Dongguk University in Seoul.

Moon may have made the wrong pitch when he met Trump in Washington this week in a bid to save the summit, Chun said.

“It was supposed to be about how they would get Kim to give up the nuclear program, but (Moon) was adamant about having Trump and Kim meet in some way or another and keeping up his peace initiative,” Chun said.

Moon held a historic summit of his own with Kim in April, with the two leaders smiling, holding hands and talking privately together. At the end of the meeting, the two declared a commitment to “complete denuclearisation” of the Korean peninsula.

Seoul officials said they would continue to push for talks between the North and the United States.

“We see the position of both countries remaining unchanged in that they seek to resolve any issue through dialogue,” Unification Ministry spokesman Baik Tae-hyun told a regular news briefing.

North Korea’s own measured reaction to Trump’s cancellation of the summit could add weight to the push, experts said. North Korea’s vice foreign minister expressed sadness the meeting had been called off, but praised Trump for making a bold decision to hold the summit and said the North was open to meeting at any time.

With tens of thousands of U.S. troops stationed in South Korea, and international sanctions restricting many interactions with North Korea, Moon will need to continue to cooperate with the United States.

The latest development won’t stop Moon from pursuing his goals of trying to bring the two sides together, said Lee Seong-hyon, a research fellow at Sejong Institute, nothing both the United States and North Korea kept the door open to continue dialogue.